2 Under-the-Radar Stocks With Market-Beating Potential

Ladies and gentlemen, are you ready to dive into the world of under-the-radar stocks that have the potential to beat the market? Today, we're going to look at two companies that might not be on everyone's radar, but they sure should be! These stocks have shown consistent growth and have the potential to deliver market-beating returns. So, buckle up and get ready to discover the hidden gems of the stock market!

First up, we have Visa (V). Now, you might be thinking, "Visa? Really? Isn't that just a credit card company?" Well, let me tell you, Visa is the Rodney Dangerfield of stocks—it gets no respect! Despite being the 13th-largest American company with a market cap of over $600 billion, Visa tends to draw little attention compared to the "Magnificent Seven" stocks like Nvidia, Meta Platforms, and Tesla. But let me tell you, Visa's consistent outperformance is something to be admired!

Visa's business model is simple yet effective. It revolves around charging small usage fees for access to its immense payment network. This simplicity allows for steady and sizable revenue growth. Over the past decade, Visa has grown its quarterly revenue by an average of 12.8% per quarter. Annual revenue has nearly tripled over that span from $13.2 billion to $36.8 billion. That's right, folks—Visa's revenue growth is nothing short of impressive!

But that's not all! Visa's asset-light business model has led to impressive profit growth. Annual diluted earnings per share (EPS) has nearly quintupled from $2 in 2017 to $9.92 today. This financial strength is a significant contributor to its market-beating potential. And with over 4 billion Visa-branded debit and credit cards in circulation today, Visa supports trillions of dollars worth of net payment volumes each and every quarter. Consequently, the company's revenue is steady and sizable.



Now, let's talk about AT&T (T). This company has been through a lot, but it's finally back on track with a new strategy and a leaner balance sheet. AT&T has taken serious steps to reinvent itself by shedding unprofitable ventures and focusing on wireless and fiber connectivity. Moreover, AT&T is addressing one of the largest drags on its stock—its less-than-perfect balance sheet.

In 2018, AT&T's total net debt hit a record high of $180 billion. Even for a massive company like AT&T, which generated nearly $30 billion per year in free cash flow, $180 billion in net debt was a staggering sum. In the years since then, AT&T has steadily reduced its debt through repayments and strategic divestitures. As of this writing, the company's net debt is $122 billion. That's still an eye-watering sum, but it's down more than 32% from its peak. As a result, the company's shares have found their legs. Since the start of 2023, AT&T stock has generated a total return of 69%, beating the S&P 500's 53% return over the same span.

Finally, income investors in particular might be attracted to AT&T because the company pays an annual dividend of $1.11, which works out to a dividend yield of 4.1%. AT&T appears to be back on track with a new strategy and a leaner balance sheet. Investors looking for an under-the-radar stock that could beat the market might want to give this iconic company a hard look.

So, there you have it, folks! Two under-the-radar stocks with market-beating potential. Visa and AT&T are not your typical high-flying tech stocks, but they have the fundamentals and the growth potential to deliver impressive returns. Don't miss out on these hidden gems—add them to your portfolio today and watch your investments soar!